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  • Tax

    Statement from Less Tax For Landlords



    Statement from Less Tax For Landlords

    We would like to thank everyone who has shown an interest in our business and welcome appropriate scrutiny as it provides an opportunity to bring even greater clarification of our proposition.  

    The following statement is in specific response to challenges raised by various individuals on Property Tribes and we thank the community for their forbearance in allowing us to address these points.

    Meanwhile, in accordance with other organisations it is our professional and commercial prerogative not to disclose our methodology and operational practices as oversight is provided by the respective professional regulatory bodies.

    Having observed for some considerable time the comments and observations directed at their professional practice in various public forums by third parties (of whom some, for reasons best known to themselves, have chosen to remain anonymous), the directors of Less Tax For Landlords feel it appropriate to help their lay-clients and members of the public to better understand aspects of our professional services.

    Before doing so, we must say that a number of the comments thus far have been entirely speculative, completely inaccurate and wholly misrepresentative.  At best they represent opinion, at worst, fabrication.  Such public pronouncements are totally unbefitting of professionals (qualified or not) claiming to be of service, and have serious legal and economic implications especially where the individuals making them freely admit their lack of professional indemnity insurance and/or relevant advisory expertise. 
       
    To quote Nick Tadd in his response as role as site moderator:

    A general debate on an overview of a tax mitigation strategy is of limited value, because it is down to the individual and their personal circumstances.  This is the reason why everyone must take professional advice and make a decision based on their own business situation.  How you mitigate that risk and then face it if challenged is all part of your business strategy and is completely personal to you.  There is no "one size fits all" when it comes to tax!”  To echo his words, we have no problem with debate and reasoned enthusiastic questioning.

    Meanwhile, another Property Tribes contributor, Paul Stevens, and without any prompting from us summed up our offering rather well when he said “LTFL are really offering a business consultancy (legal/financial/business strategy) under one umbrella.  

    The solution that they provide is not a tax avoidance scheme, it is a solution as to how to structure your business in the most efficient way to: maximise your profit, minimise your tax bill (as a percentage of profit), create working capital to expand (ironically paying more tax, as you will be making more profit!), gain full mortgage intr. tax relief (mitigating Sec 24), mitigate capital gains in later life (retirement planning), plan for inheritance tax in the future”.

    We’d also like to take this opportunity to say thank you to all of our clients, friends, prospects, and others - some of whom we regret to note have been subject to unwarranted and unfounded personal and professional attacks wherein their integrity and judgement has been called into question or that they had somehow been duped - for their support and speaking up on our behalf.

    Before addressing some of the specific points raised in this thread though, we’d like to establish some background for those who may not be wholly aware of what we do.

    Less Tax For Landlords is a specialist multi-disciplinary consultancy whose sole objective is to help portfolio landlords (and those who have active plans to become such), maximise the commercial benefits of building, running and growing a recognised professional property business.
      
    First and foremost we pride ourselves on providing clients with proper thought out business advice.

    We do not provide a standard offering; and it is certainly not the case that the services that we offer can and should be described as ‘one size fits all’.

    This necessitates an all-round service – which includes business consultancy, legal advice, financial advice and tax advice. 
    Central to this service is understanding the commercial needs and objectives of our clients, and devising solutions to help them achieve these objectives.

    Each person’s case is assessed on its own merits by our team of professionals, (lawyers, accountants, financial and business planners). These professionals are separately regulated by their governing organisations to the most exacting standards. Including, but not limited to, the ICAEW, SRA, STEP and FCA.

    To be clear, as this particular point has been repeatedly misinterpreted by some contributors on this forum, we do not offer clients tax schemes.

    We do not use ‘smoke and mirrors’ and everything we do is out in the open for HMRC to review.

    Where queries have arisen, they have been resolved by our Award-Winning Chartered Accountancy Practice, to the satisfaction of both HMRC and the client.

    Yes, the routes we advise clients to take are often ground-breaking for property owners.

    However, anything we do has already been used for many years by Accountants, Lawyers, IFAs etc. in their own business structures. 
    As such we often talk about Hybrid (Mixed Partnership) business models as the best potential solution for landlords, but stress the finer details of which depend on the specific circumstances in each case.

    We respect all landlords are entitled to investigate any solution and make a decision to proceed as they wish and we welcome any genuine contact to fully understand whether our solutions are appropriate for each individuals current and aspirational circumstances.

    With that spirit in mind, the comments and articles posted in this thread seem to focus on four separate points reasoned as ‘issues’ with our position/service:

    1.    That we treat investment structures as trading structures
    2.    That our ‘structures’ fall foul of the ‘Transfer of Income’ rules
    3.    That we offer a ‘cookie-cutter’ approach (or one-size-fits-all service)
    4.    That the directors are ‘near retirement’ and that we lack ‘depth’ in our organisation

    In answer to the above:

    1.    Do we treat investment structures as trading structures?

    We absolutely agree that a property owner cannot say his/her buy-to-let residential portfolio is a trading structure. We ARE NOT SAYING this – we HAVE NEVER said this, and we DO NOT treat investment structures as trading structures. Likewise, simply forming an LLP does not make a business a trading one.

    2.    Do our ‘structures’ fall foul of the ‘Transfer of Income’ rules?

    The Transfer of Income rules are very clear, making reference to one’s intent and motivation.

    Under no circumstances will we advise our clients to engage in purely tax-motivated income transfers.

    3.    Do we provide a ‘cookie-cutter’ approach and one-size-fits all solution?

    Like any business we aim to provide a quality service as efficiently as possible.

    To this end we have put together an engagement process for potential clients consisting of a free initial assessment and subsequent free consultation service where the current and aspirational business position suggests that we may be able to help.

    The latter requires hours of detailed assessment of an individual’s position, provided on a complementary basis.

    Of course every case is unique and not all landlords we speak to are in a position to run a business or have current business plans which necessitate the level of professional support we provide.

    We make it clear that we cannot assist everyone and do not seek to do so.  In that event we advise parties we cannot be of service after proper consideration of their factual circumstances and commercial objectives.

    It is a requirement that at each stage we will not proceed without all parties being able to give informed consent, which frequently includes a client’s existing accountant and financial adviser.

    In summary, whilst a large number of landlords’ businesses are often much alike, all have their own sensitivities that often have a significant impact on our advice, thus our service must be and is tailored to each individual client and their needs.

    If for any reason as a potential client you feel that you have not received the level of service you expected then our Customer Services team are very happy to deal with your concern directly.

    4.    Given the founding directors advancing years, what happens when they retire or finally shuffle off this mortal coil?

    That’s quite a reasonable question and for a start it’d be absurd if we didn't have a robust succession plan ourselves, of which a big part is that the majority of the business’s heads of departments and those who sit on our operational board are in their 20s, 30s and 40s.

    The overall headcount of LT4L and group companies who provide the service is more than 90.

    Besides, a major part of what we advise our clients on is about keeping their business serving their family beyond their lifetime, thus LT4L is here for the long haul, alongside our clients and their successors.

    In closing, some final points which have also been raised. 

    Firstly to our insurances.  We provide full insurance for our clients for all services rendered (both fee insurance and Professional Indemnity insurance) and have a written note from our  insurers stating that they are happy to cover all interest, penalties and extra tax (over and above that tax which would have been payable in any case) that is payable if HMRC investigate a business structure and do not agree with the way that it has been set up/conducted.

    In terms of peer recognition and as well as a having a 100% record with HMRC, most recently we were nominated for 2019 Best Landlord Service Provider at the Biennial London Landlord Accreditation Scheme Award Ceremony administered by the London Borough of Camden. The groups’ accountancy practice and co-owner, The Bailey Group, also recently picked up Accountancy Firm of the Year (51-200 Employees) at the North East Accountancy Awards 2019 and have been shortlisted for the upcoming 2019 British Accountancy Awards in the Mid-tier Innovation of the Year category.

    We are a recognised supplier of the National Landlords Association (NLA) and are the only firm serving the PRS to be approved suppliers and/or working in partnership with the RLA, NLA, iHowz, ATLAS and LLAS.

    We hope that this statement and final public comment on the matter helps clarify the situation and provides individuals with enough of a starting position to decide how best to explore their own path and how much notice to pay to individual comments made on this thread.

    We want to have long term relationships with our clients and that means we physically meet our clients regularly, both in 1:1 meetings and at events dedicated to our growing client community.

    If any Property Tribes member wants answers as to whether or not we are in a position to help them, including as to whether their particular circumstances satisfy the relevant criteria for building, running and growing a professional property business, then please complete our initial on-line assessment which can be found by following this link https://lesstaxforlandlords.co.uk/propertytribes

    **Please note that despite this dedicated link there is no commercial relationship between Property Tribes and Less Tax For Landlords.

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    Tony Gimple

    Founding Director, for and on behalf of

    Less Tax For Landlords

    0203 735 2940

    http://www.lesstaxforlandlords.co.uk

    You seem to agree with most of what I say about an investment business not being suitable to be treated as a trading business. You say ‘we DO NOT treat investment structures as trading structures’. I don’t understand how you are treating income from an investment business as trading income. I’d be grateful if you could clarify where the trading income aspect fits into your offering.
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    YJ - wouldn't it be better for you to reach out to them and book a free consultation where you will get the opportunity to ask questions based on the advice given for your particular circumstance?



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    I did book a consultation. I cancelled it when I did my due diligence and spotted that investment income was being treated as trading income as I see it. I would have had to travel to London. I don’t think my question is an unreasonable one. There is no point me having a consultation unless this is explained first. So far I’m not getting an answer. I can’t understand why.
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    maybe they do a telephone / video consultation?

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    I’m not interested in talking to a company who won’t explain how they are treating investment income as trading income. It’s a big red flag for me. I’ve given them several opportunities and they refuse to answer. I’m going to discuss it with my family member who does high level tax avoidance investigations for HMRC and see what he thinks.
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    I guess this is in response to Less Tax for Landlords Review topic.

    I like these quotes "There is no "one size fits all" when it comes to tax!” and "Each person’s case is assessed on its own merits by our team of professionals"

    I'm glad you have now taken this on board and presumably will be deleting threads like "Why BTL incorporation is an expensive mistake" whereas a non-chartered accountant you have taken a "cookie-cutter’ approach (or one-size-fits-all service).

    With statements like "Why anyone would even consider using a limited company to hold BTL property is a complete mystery to me.". Im glad you are reforming with fewer generalities. Especially when the "better solution" is behind "commercial prerogative not to disclose our methodology and operational practices".

    I like this new Tony Gimple.

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    _________________________________________________________________________


    My posts are not financial advice, just a rambling guy passing time on a coffee break.
    The team at Bespoke Finance offers advice, including Limited Company Buy-to-Let , HMO Conversion and Cheap Life Insurance.

    _________________________________________________________________________


    Wow. What’s changed? I thought irrespective of personal circumstances. Ltd companies were always the wrong choice?
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    Really? I thought (for mixed use properties), Ltd was always better (as you’ll only pay 19% capital gains when selling, and can claim interest payments as a business expense).
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    Generally speaking, companies do not pay CGT. They pay Corporation Tax on any capital gains arising on disposal regardless of whether the property is mixed use or not.

    The current rate is 19% falling to 17% next year. LT4L advocate a hybrid tax efficient structure and claim capital gains are paid at a maximum rate of 19%.
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